The Drosophila eye is divided into dorsal and ventral mirror image fields that are separated by a sharp boundary known as the equator. We have previously demonstrated that Mirror, a homeodomain-containing putative transcription factor with a dorsal-specific expression pattern in the eye, induces the formation of the equator at the boundary between mirror-expressing and non-expressing cells. Here, we provide evidence that suggests mirror regulates equator formation by two mechanisms. First, mirror defines the location of the equator by creating a boundary of fringe expression at the mid-point of the eye. We show that mirror creates this boundary by repressing fringe expression in the dorsal half of the eye. Significantly, a boundary of mirror expression cannot induce the formation of an equator unless a boundary of fringe expression is formed simultaneously. Second, mirror acts to sharpen the equator by reducing the mixing of dorsal and ventral cells at the equator. In support of this model, we show that clones of cells lacking mirror function tend not to mix with surrounding mirror-expressing cells. The tendency of mirror-expressing and non-expressing cells to avoid mixing with each other is not determined by their differences in fringe expression. Thus mirror acts to regulate equator formation by both physically separating the dorsal cells from ventral cells, and restricting the formation of a fng expression boundary to the border where the dorsal and ventral cells meet.